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Labor Unions and Labor markets

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How do labor unions alter a labor market?

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Solution Summary

Labor unions/Labor markets relationships are studied.

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Please refer to the attachment.
<br>
<br>The Labor Market
<br>To construct a market labor supply, one counts the number of individuals willing to work at
<br>each and every wage rate.
<br>To construct the market demand for labor, one counts the number of workers each firm
<br>says it is willing and able to hire at each and every wage rate.
<br>The intersection of the labor supply and labor demand curves reveals the equilibrium wage
<br>rate.
<br>Equilibrium wage rate: the wage rate at which the quantity of labor supplied in a given time period equals the quantity of labor demanded.
<br>
<br>The competitive equilibrium in the labor market is presented in Figure 1. The market labor curve includes all persons willing to work at various wage rates. The labor demand curve tells us how many workers employers are willing to hire.
<br>
<br>Labor Unions
<br>The immediate objective of labor unions is to alter the equilibrium wage and employment
<br>conditions in specific labor ...

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